Tata Sons backs Chandrasekaran's reappointment, listing plan; Trusts may challenge

The Tata Sons board has backed N Chandrasekaran for another five-year term and begun steps towards listing the holding company. The moves have triggered opposition from Tata Trusts, which has called them illegal and may challenge them.

In Short

• Tata Sons board approves five-year term for Chandrasekaran
• Chandrasekaran initially declined but reconsidered after board request
• Tata Trusts calls reappointment decision illegal

The Tata Sons board has approved a fresh five-year term for N Chandrasekaran as executive chairman and decided to start the process of listing the group’s holding company, reported PTI. Tata Trusts, however, has called the decisions “illegal” and may challenge them.

The decisions were taken at a roughly three-hour board meeting in Mumbai on Thursday, September 17.

Chandrasekaran, 63, had told the board in August that he did not plan to seek reappointment when his current term ends on February 20, 2027. He has now agreed to reconsider that decision following a request from the board.

BOARD VOTES TO REAPPOINT CHANDRASEKARAN

Tata Sons said its Nomination & Remuneration Committee (NRC) unanimously asked Chandrasekaran to reconsider his decision, citing his contribution and the larger interests of the Tata Group.

“After due deliberation and in recognition of his contributions and the larger interests of the Tata Group, the NRC unanimously resolved to request him to reconsider his decision and to recommend him for re-appointment at the next Board meeting,” Tata Sons said, the report mentioned.

The board later approved his reappointment for another five-year term by a majority vote.

The appointment will now need approval at the company’s annual general meeting (AGM).

However, Tata Trusts opposed the resolution to reappoint Chandrasekaran as Tata Sons chairman, with Tata Trusts Chairman Noel Tata reiterating at the board meeting that the move was “illegal”. The Selection Committee will continue to follow the company’s Articles of Association.

TATA SONS MOVES TOWARDS LISTING

The Tata Sons board has also decided to initiate steps to list Tata Sons, the holding company of the Tata Group.

Tata Sons said the board would take steps to comply with the applicable Reserve Bank of India (RBI) guidelines and seek guidance from the RBI, Tata Trusts and other stakeholders on the compliance requirements.

The listing decision will also require approval at the AGM.

The move comes after the RBI rejected Tata Sons’ application on September 11 to surrender its registration as a core investment company. Tata Sons had sought the exemption to avoid a stock-market listing.

The RBI had classified Tata Sons as an “upper layer” non-banking financial company in 2022. This classification requires the company to list within three years. The deadline expired in September 2025 while its request for deregistration was under review.

Tata Sons had earlier repaid more than Rs 21,000 crore in debt in an attempt to qualify for the exemption.

The board’s decision to retain Chandrasekaran comes as Tata Sons prepares for a possible listing.

According to sources, board members felt that continuity in leadership would reassure potential investors ahead of the listing process. Investors generally seek clarity on a company’s management when it prepares for an initial public offering.

The decision also appears to bring the succession process to a halt. The Sir Dorabji Tata Trust had started a formal process to identify Chandrasekaran’s replacement. Tata Steel chief executive TV Narendran, Tata Sons group chief financial officer Saurabh Agrawal and National Stock Exchange chief executive Ashish Chauhan were among those being considered.

That process is now expected to be paused or discontinued.

TATA TRUSTS MAY CHALLENGE DECISION

Tata Trusts, which together control about 66% of Tata Sons, have opposed the board’s decisions.

Noel Tata reiterated at the board meeting that the resolution to reappoint Chandrasekaran as chairman was an “illegal position”, according to the statement from the Trusts.

The Trusts are expected to consider their options, including challenging the decision.

The listing decision has also exposed differences within the Trusts. The Sir Dorabji Tata Trust sought to direct nominee director Venu Srinivasan to vote against the listing. Srinivasan, however, refused, citing his independent duty as a director and his position as a joint nominee, according to people familiar with the matter, the report mentioned.

Any legal challenge to the RBI’s rejection can be pursued only by Tata Sons itself and not directly by the Trusts, the people added.

HOW THE SUCCESSION ISSUE UNFOLDED

Chandrasekaran has headed Tata Sons since February 2017, when he succeeded Ratan Tata as chairman after the board removed Cyrus Mistry.

He was unanimously reappointed for a second five-year term in 2022.

Tata Trusts had backed a third term for Chandrasekaran as early as 2025. However, the proposal stalled in February 2026 after Noel Tata raised concerns over losses at businesses including Air India and Tata Digital.

Noel Tata had also set conditions for supporting the renewal, including keeping Tata Sons unlisted.

Meanwhile, the Shapoorji Pallonji Group, which owns about 18% of Tata Sons, has pushed for a listing to unlock value from its stake and support its own debt repayment.

An eventual Tata Sons IPO could be among the largest in Indian history. Even a 1% stake sale has been valued at an estimated Rs 15,000–20,000 crore, implying an overall valuation of around Rs 20 lakh crore, or roughly $230 billion, as it holds controlling stakes in more than a dozen listed companies across sectors including steel, automobiles, software services, hospitality and aviation, the report mentioned.

- Ends